The union representing
United Parcel Service Inc.
UPS 0.69%
pilots on Tuesday said it thinks it is nearing an impasse in contract negotiations with the delivery giant after nearly five years.

Federal mediators are expected to decide whether the two parties have reached a stalemate after UPS presents its closing positions for its final proposal on new contract terms scheduled for next week, according to the Independent Pilots Association. If mediators find the two groups are at an impasse, they could release the parties from mediation to start a 30-day cooling-off period before a lockout or strike could take place, the union said.

The organization representing UPS’s 2,500 pilots says the two parties have yet to reach decisions on issues ranging from pay to retirement benefits, but that the biggest issue causing negotiations to stall is work rules, specifically to avoid fatigue. The pilots want more time to rest between flights, with rules closer to what the Federal Aviation Administration has come up with for airline pilots.

The union “believes we are nearing the point where the mediation services of the [National Mediation Board] will be exhausted, and the possibility of an impasse, as defined by law, becomes a reality,” said Capt.
Robert Travis,
president of the union, in a release.

“Speaking broadly, negotiations continue to progress under the supervision of the [National Mediation Board],” a UPS spokesman said. “We continue to negotiate in good faith for an agreement that is good for our employees, our customers and our company.”

UPS in the past has said it takes excellent care of its pilots, with higher pay, better benefits and less flying time than others in the industry. The delivery giant has had a total of four contracts with its union throughout its more than a quarter-century of running an airline.

Shipping-industry consultants, who work with UPS customers, say a strike is still unlikely.

“The long and short of it is that there are a number of things that would need to happen (or not happen) in order for a strike to be a reality, and I feel like we are relatively far from that point now,” said
Keith Byrd,
partner at shipping consultancy Transportation Impact LLC, in an email. “I think UPS customers, as a whole, understand that a strike is unlikely.”

Earlier

Airlines and railroads fall under the U.S. Railway Labor Act, which makes it more difficult to strike. Under that law, contracts don’t expire, and federal mediation is mandated if the two sides can’t come to an agreement. The mediators also can call for a recess in negotiations if the two sides reach a stalemate. UPS and its pilots union entered federal mediation in early 2014.

UPS uses planes to fly deliveries around the world and domestically, with space typically reserved for higher-revenue packages that need to get somewhere fast. Any disruption to UPS’s operations would ripple throughout the network. UPS last faced a strike in 1997, when its Teamsters employees walked off the job for a little more than two weeks, costing the company an estimated $600 million.

The International Brotherhood of Teamsters—which represents about 250,000 UPS employees working as drivers, package handlers and loaders—pledged last year to stand with the pilots if it came to a strike, saying its workers wouldn’t cross picket lines.

UPS pilots voted overwhelmingly in October to authorize their executive board to call a strike if and when it sees fit. Contract talks between UPS and its pilots typically last several years, and in the last two rounds of negotiations the union called for a strike vote before an agreement was eventually reached.